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Managing a credit card responsibly after being in debt with a DMP/defaults
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Thank you, yes I didn't express it very well in my post re credit scores. I have learned that scores and 'gamifying' our scores through gimmicks are just that, a marketing tool and a way to try to get consumers to use paid for services offered by the CRAs. What I meant was that I want to show that I can manage credit responsibly because my next step will be to apply for a mortgage.
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Exactly! I needed to book a hire car a couple of years ago, and without a credit card my options were severely limited. I ended up paying far more than if I'd been able to use one of the main car hire companies, and I had to travel further to pick up my car. I do believe that it's useful to have one card, at least.
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When you set up a direct debit, make sure that your statement clearly says your payment will be taken by direct debit. It can happen that, although you’ve set it up, you still might have to make the manual payment that month because the direct debt won’t actually be in effect until the month after.
Also direct debits lapse after a year or so of not being active. So if you don’t use your card for a long while, you’ll probably need to set it up again, even if the statement says it’s still in effect.
And also make sure that you understand what happens if you make a manual payment as well, especially for less than the full amount. Some card issuers will take less or nothing by direct debit for that month, others will still take the money from your account regardless, which can be a nasty shock if you’re not expecting it.
If ever you’re unsure, read the t&cs, speak to them, or make sure you’ve made a manual payment to cover at last the minimum payment, to ensure you don’t get a missed payment marker in your file by accident.0 -
Not true, regularly use my debit card to book hotels and hire cars in UK, US, Colombia, Italy and Spain.
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Baby Step 6/7 . £20000 + saved and invested. £47,000 deposit paid on new home CONSUMER DEBT FREE !!!0 -
Seems to me that was sloppy wording - there's generally no problem in booking hotels and hire cars with debit cards, but when they require a pre-authorised deposit at the time of arrival, many businesses (especially the main car rental ones) will specifically insist on this being put through on a credit card.
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They put holds on your money yes
A cc has a hold on the bank's money
Far better to have a CC you can fight unfair charges with than the hotel just taking your money
Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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